Products

Topics

Tax Bill Could Be Bigger Political Gamble Than Obamacare

Both were enacted by strict party-line votes, but the Republican legislation faces considerably more public opposition.

President Trump walks with Vice President Mike Pence, House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell at an event on the South Lawn of the White House Wednesday to acknowledge the final passage of tax-overhaul legislation.

President Trump and congressional Republicans have just taken the same leap of faith that Democrats did when they passed the Affordable Care Act.

When President Obama and the Democratic House and Senate majorities muscled through the ACA in 2010, the bill represented a big policy victory, but an even bigger political gamble. Though Obamacare fulfilled the party’s decades-long goal of providing (nearly) universal health care, the immediate backlash in the 2010 election helped propel Republicans to the biggest midterm gain in the House for either party since 1938 and gave them a majority in the chamber that they still haven’t relinquished.

Republicans could face a similar equation of costs and benefits from the tax bill they just passed. The legislation will advance the preeminent GOP goal of cutting taxes, particularly on high earners and businesses. But it could represent an even greater bet than the ACA because polls show it faces substantially more public opposition.

Obamacare demonstrated the difficulty of building broad public support for legislation that passes Congress on a narrow partisan basis. No Republican voted for final passage of the ACA in either chamber. The tax bill likewise failed to win support from even a single Democrat. By historical standards, that’s even more striking than the ACA’s partisan shutout. In 1981, President Reagan’s sweeping tax cuts drew support from 25 Democrats in the Senate and 113 in the House. President George W. Bush appealed more narrowly with his 2001 tax cut, but even then, 28 House Democrats and 12 Democratic senators voted yes. But not even the 12 House Democrats in districts that supported Trump last year nor the 10 Democratic senators facing 2018 races in states he carried felt compelled to support this latest measure.

That’s largely because the tax bill so emphatically tilts its benefits toward Republican constituencies and directs its costs mostly to Democratic ones. Recent studies have found the new plan lavishes more than twice as great a share of its savings on the wealthiest earners than even the Bush tax cuts did. The nonpartisan Tax Policy Center concluded this week that the top 5 percent of earners will sweep up nearly half of all the plan’s benefits by 2025 and fully 99 percent by 2027.

On the flip side, the plan’s biggest losers remain residents of blue-leaning states, particularly those in the major metropolitan areas with high housing costs that are now the geographic cornerstone of the Democratic coalition. Though the final bill removed many of the House’s most egregious arrows at Democratic constituencies—such as those targeted at graduate students and alternative-energy producers—the legislation’s limits on state and local tax deductions still threaten tax hikes for many blue-state suburbanites. As Republican Rep. Lee Zeldin of New York, a staunch Trump defender, put it when announcing his opposition, “this bill remains a geographic redistribution of wealth, taking extra money from a place like New York to pay for deeper tax cuts elsewhere.” The Democratic-leaning millennial generation, which will receive few direct benefits and inherit the tab for up to $2 trillion in additional federal debt, is also on the short end.

Like Democrats in 2010, Republicans now insist voters will warm to the tax plan as it’s implemented. But Seth Masket, a University of Denver political scientist who studied the ACA’s electoral impact, told me the law didn’t gain significantly more public support until this year, when Trump tried to repeal it. Masket is dubious the tax bill will look much better by next November’s elections. “Generally speaking, legislation isn’t likely to become much more popular after it passes,” he said.

Seven years ago, Democrats hoped the ACA would allow them to recapture working-class whites by providing them a tangible benefit. Instead, the law hastened their shift away from Obama because most of them viewed it as a welfare program: In the exit poll for the November 2010 midterms, 57 percent of non-college-educated whites backed Obamacare repeal and 63 percent voted Republican for the House.

Many Republicans similarly hope that the tax bill will reverse the movement of white-collar whites from Trump by providing them a tangible benefit. But a national CNN poll released Tuesday, confirming earlier surveys, found that twice as many college-educated whites oppose the plan as support it, and two-thirds think it would chiefly benefit the wealthy. After mostly backing House Republican candidates in the 2016 exit poll, a 55 percent majority of those voters now prefer that Democrats control Congress, according to a Quinnipiac University survey also released Tuesday.

To pass their bill, Republicans ignored the hostile polls, the unified Democratic opposition, and a succession of independent analyses showing the plan would massively increase the federal debt while generating minimal additional growth. Democrats could point to more favorable analyses of Obamacare’s potential impact when they passed the ACA, but they otherwise blew past similar political guardrails. They paid a heavy price for that choice in the next election, and Republicans have now steered themselves onto the same bumpy road.

"Former Secretary of State Rex Tillerson was spotted entering a congressional office building on Tuesday morning for what a committee aide told The Daily Beast was a meeting with the leaders of the House Foreign Affairs committee and relevant staff about his time working in the Trump administration. ... Tillerson’s arrival at the Capitol was handled with extreme secrecy. No media advisories or press releases were sent out announcing his appearance. And he took a little noticed route into the building in order to avoid being seen by members of the media."